UAE's e& considering stake acquisition in Ethiopia's Ethio Telecom

Abu Dhabi company says it is at an 'early stage' in its assessment of buying into the telecoms operator

The UAE's e& has been on an acquisition spree in recent months. Leslie Pableo / The National
Powered by automated translation

The UAE's biggest telecoms operator, e &, is considering acquiring a stake in Ethiopia's Ethio Telecom, which would potentially boost its international portfolio.

The company, formerly known as Etisalat, said it is at an “early stage” of assessing a potential stake acquisition in Addis Ababa-based Ethio, e & said on Tuesday in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.

The telecoms firm did not disclose further details, including how much of the state-owned Ethiopian company it is considering purchasing and for how much, as well as a timeline for the transaction.

“Should there be any developments on this subject, we will keep the market updated in due course,” e & said.

The telecoms industry is going through a major transformation, especially with the advent of new technologies that companies are trying to integrate into their operations to expand their consumer bases and add new revenue lines amid intensifying competition.

Telecoms operators with strong balance sheets are increasingly seeking mergers and acquisitions to gain access to new markets and exchange expertise that could open up new markets.

Earlier this month, e & said it was in talks with Czech investment company PPF Group regarding a possible partnership as part of its push into Europe.

That would potentially give e & access to 25 other countries across Europe, North America, Asia and Africa, covering the financial services, telecoms, media, e-commerce, real estate, biotechnology, and transport products and services sectors.

The company is expanding its presence and has been on an acquisition spree in recent months. In May, it invested $60 million for a 10 per cent stake in South Korea’s cloud management company Bespin Global, and also formed a joint venture that will provide public cloud services in the region.

In April, it signed a $400 million deal to acquire a majority stake in Careem’s Super App, a spin-off from Uber, as part of efforts to expand its consumer digital offerings.

This year, e & increased its stake in Vodafone Group to 14 per cent as it continues to consolidate its shareholding in the British company as part of its international expansion plans.

In May, e & reported a net profit of Dh2.19 billion ($599 million) and a revenue of Dh13 billion in the first quarter of 2023 as its subscriber base grew.

Shares of e & settled about 0.5 per cent lower on Tuesday on the ADX, which ended the trading day flat.

Business Extra: Chief executive of e& on Careem Super App deal

Business Extra: Chief executive of e& on Careem Super App deal
Updated: July 11, 2023, 2:41 PM